Walking the path to financial freedom and security

Want to Save $100,000 on Your Mortgage? Improve your Credit Score

Well, you’re right. There’s always a catch when you’re talking big numbers. But that number was what caught my eye in this recent infographic from Quizzle.

When you’re talking a 30 year, $300K mortgage, the cost difference in interest rates you get for the highest and lowest credit scores can really add up – the power of compound interest, but not in your favor if you’re on the low end of the credit spectrum.

Planning on buying a home? Refinancing your existing mortgage?

Plan for success now, and get your free credit report and improve your credit score as much as possible before you start the process.

Protect Yourself

You check your credit report every year, right? Right? If so, congratulations! Because you’re one of the only 35% of Americans who did.

For the rest of the 65%, make sure you check your credit report every year for errors – identity theft, orphaned credit accounts, etc. Thanks to a federal law, you can get a free credit report every year from AnnualCreditReport.Com. While it won’t include your credit score, it will show you all your information so you can contest any errors.

6 Comments

I wonder what might be the percentage of credit report errors that if you don’t make sure the information on you is accurate, time will come that it will backfire on you. I agree that it pays to check but can’t there be a way they can make their reports correct?Jen @ Frugal Rules recently posted Who Is Responsible for the Growth in Wealth Inequality?

I operate on the assumption that any error will eventually come back to bite me.

No matter how careful I am personally with my information security, I have dependencies on everyone I share my information with. My Social Security number has been disclosed via human error or theft from my graduate school, and two previous employers. At least, those are the ones I know about – who knows how many other times it has happened and it hasn’t been discovered, or I haven’t been notified.

I’ve had my identity stolen twice. Both times it was discovered quickly, and there was little direct financial loss to me. But looking at the mortgage impact of a reduced credit score, it makes me wonder about the indirect impacts to my financial health. So always check your credit report. If it hasn’t happened to you yet, it will, it’s just a matter of time.

Thanks for the great read! There will always be mistakes when paying your credit card bills, but 25% of people had mistakes. That is a huge problem.David recently posted Trends in the Dollar value in 2014

True, David, but look at the recent Target credit card theft – approximately 40 million of Target’s customers’ credit and debit cards stolen over a multi-day period.

When vendors don’t institute basic safeguards due to cost, there will always be fraudulent charges. My personal information has been stolen / lost so many times my credit card gets fraudulent charges about once a year – most recently someone took a vacation in San Diego on my American Express. Simple enough to fix with a call to the credit card company, and a new card, but you have to pay attention to your bills.

I suspect the number of billing mistakes is much much higher, but so few people don’t pay attention to their charges and only notice when it’s several hundred dollars more than they expect.

We actually probably saved a ton of money by paying off $20k worth of credit card debt BEFORE we took out our mortgage and bought our current home. In doing so, our credit score jumped nearly 100 points, allowing us to get the best interest rate available. Sweet deal.